Objects in motion: Tent to stay in motion, we posited in 2001. Which stocks are headed up now?(Industry Overview)(Statistical Data Included)

Publication: Buyside

Publication Date: 01-MAR-02

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COPYRIGHT 2002 Adams Business Media

Last March, Buyside looked for momentum plays in the market in "Upward Motion." We decided to revisit the idea in a market that sees leaders rise and dip as quickly as they appear on investors' radars.

First, we took the old list to Steven DeSanctis of Prudential Securities, our long-time screening ally, and asked him to review it. We looked at the criteria used then, and asked DeSanctis to incorporate what he expects to be meaningful in the coming months.

Buyside took a look at the stocks that have shown the most spark in recent months and have additional signs of continuing that upward trend. DeSanctis further broke out the list by industry and by large-cap, mid-cap and small-cap status, seeking the stocks with the most adrenaline. Two measures of stock price momentum are used, both the recent one-month total returns and the recent three-month total returns. Additionally, DeSanctis incorporated the number of analysts covering each stock and its stock price relative to its average earnings per share estimate. DeSanctis notes that both of these are signs of each stock's recognition in the investment community.

Which sectors fared the best among small-cap stocks?

"Consumer services continues to perform well, as earnings have held up relatively well over the last year and they still sport cheap valuations." says DeSanctis, who serves as director of small-cap research for Prudential Securities.

This collection of consumer discretionary businesses covered a wide range of companies, from Ryan's Family Steak Houses (RYAN) to Winnebago Industries (WGO) to clothing retailer Chico's FAS (FAS). Two gambling-related firms -- Alliance Gaining Corp. (ALLY) and Boyd Gaming Corp. (BYD) -- also stood out.

Alliance designs and manufactures gaming devices and systems, including video poker, slot machines and gambling games. Also, the company operates casinos in both Nevada and Mississippi. Though it may...

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